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The Federal Government Must Protect Australian Travellers

Airline Calls For the Government to Fund Airport Upgrades Out of Sydney Airport Sale Revenue Instead of Saddling Air Travellers With Even More Indirect Taxes

Virgin Blue today continued to press the Federal Government to ensure the security and well-being of all Australians be they in the airport, nightclubs, shopping malls or at the cricket.

The airline noted that Australians pay some of the highest taxes in the world and the trade off for that is that people know the Government is able to cover its core responsibilities, including defending Australians from threat in their everyday lives, both at home and abroad.

The airlines have already spent tens of millions of dollars in the past year to look after air passengers and will continue to work closely with the Government to ensure that Australia has the highest levels of security in the world.

The concern however, is whether the government should pass the buck on its responsibility to the already struggling travel and tourism industries.

Brett Godfrey, Chief Executive Officer of Virgin Blue stated, “Certainly, the government is fully aware that we have no choice but to pass these cost onto consumers in terms of higher air-fares. Its been proven economically again and again that consumers are price sensitive and this will continue to be a major blow to hotels, restaurants and others whose livelihoods depends on the travel dollar**. While people will spend any amount of money to look after the security of their loved ones, this doesn't change the fact that the public votes with their feet when it comes to air travel. People value security, but since these measure are likely to cost more than the yet to be removed Ansett levy, many will simply chose to stay at home.”

Mr. Godfrey added, “It’s a bit like asking the fishing industry to pick up the tab on border protection in the Timor Sea. If the government doesn't have a core responsibility for the welfare of all Australians, then we can only speculate as to which industry they will ask to pick up the tab for the Australian Defence Force. The lesson from both Bali and September 11 is that security is something people want whether they are at work or a nightclub or anywhere else, not just at the airport.

Brett Godfrey pointed out, “The Government just made a $5.5 billion windfall out of the sale of Sydney Airport, yet they again expect air travellers to pay for the upgrade of a facility that they profitably spun off during the period that they were conducting their own security review. It now turns out that the airports the Commonwealth built and profitably sold are not up to their own security standards. Clearly the Government needs to reinvest some of its aviation gains in these shortcomings instead of outsourcing such problems on the travelling public to solve issues such as Ansett employee entitlements, foot and mouth disease, Olympic counter-terrorism let alone the need to make Australian’s secure.”

Virgin Blue has estimated that the costs of the new government mandates to be well in excess of the suggested $180million.

Like all airlines and airports, Virgin Blue will have no choice but to pass these costs on to travellers, making this simply another tax on travel and another cruel blow to tourism.

**The Federal Government’s forecasting group - the Tourism Forecasting Council - recently downgraded projections for visitation over the next 10 years. Inbound arrivals are estimated to be 15 per cent down on original forecasts, which will have massive impacts on national employment and imports. The cumulative difference in export earnings from this (December 2002) and the previous TFC forecast (April 2002) editions is more than $30 billion. It has been demonstrated that both domestic and international tourism demand is highly price elastic and any further taxes are likely to worsen this situation.